An IC should have his or her own liability insurance policy just like any other business; you need not provide it. This type of coverage insures the IC against personal injury or property damage claims by others. For example, if an IC accidentally injures a bystander while performing services for you, the IC’s liability policy will pay the costs of defending a lawsuit and pay damages up to the limits of the policy coverage. This helps eliminate an injured person’s motivation to attempt to recover from you as well as the IC for fear the IC won’t be able to pay. Also, having insurance helps show that the IC is in business.
The IC should also agree to indemnify—that is, repay—you if somebody he or she injures decides to sue you.
Suggested Language
Insurance
Client shall not provide any insurance coverage of any kind for Contractor or Contractor’s employees or contract personnel. Contractor agrees to maintain an insurance policy of at least $[State amount] to cover any negligent acts committed by Contractor or Contractor’s employees or agents while performing services under this Agreement.
Contractor shall indemnify and hold Client harmless from any loss or liability arising from performing services under this Agreement.